New Study Comparing Private and Public Sector Wages

“There’s significant correlation between public and private sector pay over time: we know that from wage bargaining. It’s interesting to see that some in government have actually admitted it. Both reports from the European Commission and Canada’s Associate Deputy Minister of Finance have stated that a major policy reason for constraining public sector pay is “to reduce undue upward pressure on private sector wages.” (see footnote 12 in the report for more studies on this issue).

That’s right: governments are constraining public sector pay not so much to reduce deficits–they could reverse the corporate tax cuts to achieve that–but also to help suppress private sector wages. And that’s why the CFIB has been pushing this with their own flawed reports, so wages for their workers will be kept low and profits will rise.”